The Fair Work Commission has this week awarded an $18.70 wage rise to 1.5 million Australians on award wages. Predictably, business groups are saying the wage rise will force struggling businesses to sack staff; while unions are saying the wage rise is not enough.

If a just decision is deemed to be one where both parties are unhappy then it seems the FWC has got it just right.

Minimum wageAccording to Justice Iain Ross, FWC President, there has been almost no growth in the real value of award wages in recent times. “The deterioration in the relative living standards of award-reliant workers, the needs of the lower paid, the recent widespread improvement in labour productivity growth, the historically low levels of real unit labour costs, and the absence, in aggregate, of cost pressures from the labour market, are all factors favouring a real increase in minimum wages.”

Business groups had grudgingly offered an $8.50 a week raise; while unions demanded nothing less than $27 a week.

Retailers are making the usual Chicken Little claims, saying the exorbitant figure handed down by the Fair Work Commission will result in either sackings or many businesses being driven to the wall.

Unions are no better – Predicting a new class of urban peasants; doomed by this stingy decision to live forever in a cycle of hand-to-mouth poverty.

What is true, is that today’s National Accounts show stronger than expected growth. The dollar is climbing. And interest rates are being held steady by a Reserve Bank that seems cautiously optimistic.

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